Stellantis CEO Carlos Tavares' destructive tenure has come to an abrupt but welcome end. Tavares, who has led the automaker since its 2021 merger that brought together brands such as Fiat, Dodge, Jeep, Peugeot, Citroën and Alfa Romeo, is leaving a company facing tough challenges. Stellantis is facing weak sales, an inventory glut, massive layoffs, labor unrest, dealer pushback and a difficult push toward electric vehicles, all signs of a deepening crisis.
Just 10 months ago, Stellantis announced a $39 million compensation package for Tavares, making him the world's highest-paid auto executive. This marked a 56% increase from his previous earnings. When asked about his salary, Tavares told reporters.“90% of my salary is determined by the company's performance, so this proves that the company's performance is not that bad.''
Mr. Tavares failed to serve the company, its shareholders, customers, and franchised dealers. Instead, he served two masters: himself and globalist environmental bureaucrats.
U.S. auto dealers outraged by the company's woes have directly linked the company's crisis to Mr. Tavares' shoddy leadership. They accuse him of making short-sighted decisions that caused long-term damage to the company while securing significant financial benefits for himself in the short term.
Under Mr. Tavares' leadership, U.S. Dodge, Chrysler and Jeep dealers have struggled with overwhelming unsold inventory. Dealers have criticized inventory as too expensive compared to competitors, made worse by an outdated lineup with new models still years away. The company discontinued its popular gasoline-powered cars, leaving a gap in its product lineup. Rather than lower prices or offer incentives to free up dealer lots, Stellantis chose to cut production and lay off employees, making the situation worse.
The company's financial results for the third quarter of this year were disastrous, with a drop almost unprecedented outside of an economic crisis or major disaster. World car sales 20% reduction Compared to the same period in 2023, U.S. sales fell 36%, plummeting from 470,000 to less than 300,000. Sales decreased by 27% compared to the same period last year. In response, Stellantis cut production and delivered 170,000 fewer cars to dealers, but this did not solve the glut of aging inventory that still clogs dealer lots. Ta.
EV bubble burst
Stellantis' sales decline in the third quarter of this year was even more pronounced compared to the second quarter. Third-quarter revenue fell to $36 billion, a sharp 23% drop from $47 billion in the second quarter. Sales virtually fell during the summer, signaling a sharp economic downturn for automakers.
One of the key factors behind Stellantis' limited and outdated product lineup was Mr. Tavares' unwavering commitment to the future of electric vehicles. Several mass-produced gasoline-powered models have been discontinued to make way for electrification, which is still years away.
For example, the Chrysler 300 will be phased out in 2026 with plans for an electric successor, and dealers won't have a comparable product to sell in the meantime. Similarly, the Dodge Charger and Challenger will be discontinued in 2023 to make room for a future electric charger, further shrinking the lineup. With the transition to EVs slow, dealers now face an uncertain future and a clear lack of viable products.
Amid the turmoil, Stellantis maintained its luxury car pricing while reducing labor costs by moving production and labor costs to lower-wage workers outside Europe and the United States. Over the past year, there have been near constant announcements of layoffs, including 400 engineers at Stellantis' U.S. headquarters. who was let go And in their place, Brazilian and Mexican engineers were hired at significantly lower salaries.
As Europe's electric car bubble bursts and consumers increasingly reject EVs, especially in the wake of reduced government incentives, Stellantis dealers seek relief from strict EV mandates imposed on the industry. Ta. But Tavares refused to intervene.
In fact, Tavares took the opposite approach. Tavares redoubled Stellantis' efforts as other automakers, including Volkswagen and Renault, urge European regulators to loosen emissions rules aimed at accelerating the transition to electric vehicles. unattainable goal.
“Electrification is a high-cost transition, and only companies with the financial strength and the vision to adapt quickly can survive in this environment,” he said, expressing his belief that the company could outlast its competitors. showed.
Carlos Tavares' reluctance to fight for Stellantis as the EV bubble burst forced European dealers to take matters into their own hands. They appealed directly to the European Commission for redress. Imminent 2025 emissions regulations.
Dealers revolt, shareholders suffer
Meanwhile, in the United States, the Stellantis National Dealer Council made an announcement. A poignant open letter I went to Tavares just a few weeks ago. The letter aimed to “sound the alarm” to investors, employees and Stellantis board members about the CEO's “reckless short-term decisions.” The council accused Mr. Tavares of causing the “rapid deterioration” of the Dodge, Ram, Chrysler and Jeep brands and overseeing a significant collapse in market share.
For more than two years, the U.S. Stellantis National Dealer Council has been sounding this alarm to your U.S. management team, warning them that the direction they are setting Stellantis in the U.S. will be disastrous in the long run. . A disaster, not just for us, but for everyone involved, and now that disaster has arrived. In 2023, you engineer record profits for Stellantis and earn the title of highest paid automotive CEO. You personally made a record amount of money that year, about $40 million. Unfortunately, the engineering and structuring that year led us to the situation that we told management today would be.
Payments for the decisions made to generate these profits are due in 2023, and any attempt to get a soft landing with the support of employees, dealers, and suppliers is frankly a mistake. We didn't create this problem, the federal government didn't create this problem, the UAW didn't create this problem, your employees didn't create this problem, you created this problem. I made it.
and Tavares' departureStellantis has the opportunity to begin a rescue operation, but at this stage it may be more of a rescue operation.
glenn beck I've recently written about the growing wave of anti-institutional anger that I've been warning for years that it could descend into chaos. Mr. Tavares' unusual self-awarded compensation, approved by the board despite actions that weakened a global industrial giant, will only fuel that anger.
Mr. Tavares failed to serve the company, its shareholders, customers, and franchised dealers. Instead, he served two masters. Globalist environmental bureaucrats who seem content to watch themselves and Stellantis collapse as gasoline car manufacturers.
To maintain both civil and economic order, investors and corporate boards must take responsibility for preventing further destruction of institutions like Stellantis. We cannot allow greedy and selfish leaders like Carlos Tavares to undermine businesses at the expense of all other stakeholders.
